What business leaders can learn from how lawyers operate 

There’s a trope that lawyers make poor businesspeople. Risk-averse. Narrow. Gradual. Some studies lend credence to the notion that lawyers may not be best suited to lead companies. Research published in the Harvard Business Review suggests that attorneys tend to be better leaders in industries with high litigation risk—but that lawyer-CEOs reduce value in most other corporate settings.

These critiques have little to do with knowledge of the law. Rather they center on the mental models that guide attorneys’ decisions, Forbes reports. But there are things business leaders can learn from lawyers. 

Here are three legal concepts, according to Forbes, that are useful in growing a business. 

  1. Due process—Due process under the law is rooted in principles of fairness. In business, this concept could be translated as notice and opportunity to perform. Small businesses frequently lack clear job descriptions, performance metrics, or evaluative reviews. This causes confusion about the type of work employees should do and whether they are succeeding. It can also lead employers to intervene too late or retain underperformers too long. 
  2. Generalist judges and deference—For the most part, American judges are generalists. In effect, that is the role of a business leader. CEOs are not functional experts like the heads of accounting or engineering. They have to look to specialists without shirking the responsibility to have the final say. This requires the confidence to look unknowledgeable when seeking clarification from functional experts. 
  3. Precedent and signal—There is a dual mandate when a judge resolves a case. On one hand, the judge must resolve a dispute between two parties by applying the law evenhandedly. At the same time, the judge must appreciate the precedent a decision sets and the signal it sends to future actors. Often business leaders make employment decisions in a vacuum. For example, when negotiating compensation, company leaders may view the discussion as a bilateral one—a decision between the individual employee and the company. But employees speak to one another, and the decision will send a signal to others on the team. Read the full story from Forbes.